Is web hosting right business for you?

If you are reading this article, chances are you already know what web hosting means and what may be involved in starting a web hosting business. Web hosting is the business of providing storage space for web sites, and allowing public to access web pages on the Internet. The company that offers web hosting services is referred to as a web host, and the web host is responsible for providing storage space, database, Internet connectivity, and other value-added services for publishing a web site and offering email services.

With proliferation of Internet and convenience of accessing information on the world-wide-web, more and more brick-and-mortar businesses venture onto the web and conduct business online. Individuals also create personal web sites to share information with friends, family and others. The demand for web hosting service increases every year, and same is true with quality of web hosting services demanded by customers.

With ever growing demand of web hosting services, many people think about starting a web hosting business. Although it may seem easy to start with very little capital, it is not an easy business to run. It takes patience, dedication, and technical knowledge among other necessary business skills to run a successful web hosting company. With the innovation of control panels and billing software, some may argue this statement but in reality it isn't that simple. As an owner of a web hosting company myself, I would like to share my experience starting a web hosting business, and offer helpful tips and knowledgebase I have learned on effeciently operating a web hosting company.

The biggest hurdle any web host must overcome is the 24x7 support. If you can't provide 24x7 technical and customer support to your customers, you do not qualify to become a web host. The 24x7 support does not necessarily have to come from you directly, but as a company you must be able to offer this service either through your hosting provider (if you're a reseller) or a third-party support company. Prompt and knowledgable support is the key differentiator in operating a successful web hosting company.

The second most important aspect of running a web hosting company is sales and marketing of your services. The web hosting industry is oversaturated with small to medium-sized web hosts, and the competition is very fierce in that it cost very expensive marketing dollars to attract a reasonable number of customers to arrive at break even point or make a tiny profit. The cost of pay-per-click (PPC) marketing your hosting company on Google, Yahoo and MSN will cost as much as 5 to 10 times more than marketing services from other industries. Similarly, placing banner or text advertisement on reputable content provider websites will cost a lot more than you would want to spare. The best way to build traffic to your website is by adding your site to relevant directories and promoting it on content provider sites as well as making search engines work for you. However, optimizing your web pages and writing search engine friendly contents often takes months or even years to see noticeable result. To overcome this hurdle, you'll need money or time.

The last challenge any entrepreneur has to overcome is putting in your time, dedication, effort and getting full support from your family. Web hosting business is no different than any other business, and as a business owner you must prepare a solid business plan and strategies to grow your business. You must have expertise in the field you will be engage in, and web hosting business is no exception.

A lot of people attempt to start a web hosting company thinking that it can be started part-time, and by reselling web hosting service provided by a larger hosting company. With advent of control panels and billing software, it seems awfully easy to setup a website that sells web hosting services online. A template-based billing application and a web hosting control panel loaded on a pre-built web server indeed make a very complicated server administration job much simpler. However, when a problem occurs (and they do often occur) it is your responsibility as a web host to resolve those issues, and it requires great deal of technical knowledge to solve the problem and communicate effectively with your customers. If you are in it for leisure, part-time, and get rich quick scheme; web hosting business is not right for you. If, however, you are able to overcome major hurdles described above and be able to make long-term commitments for much bigger rewards, web hosting can be an excellent business with a lot of potentials and room to grow.

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Chapter 2. Decisions, Decisions & Decisions